ZURICH (Reuters) - A Dutch court on Wednesday ordered a criminal investigation into the conduct of UBS Chief Executive Ralph Hamers when he was the head of Dutch bank ING Group, which failed to implement anti-money laundering laws in the Netherlands.
The investigation comes as a blow for UBS just a month after Hamers became head of the world's largest wealth manager, which is trying to move on from a legacy of costly court cases.
The Swiss bank said in a statement that it had full confidence in Hamers' ability to continue managing while Dutch prosecutors conducted their investigation.
Hamers ran ING, the largest bank in the Netherlands, from 2013 to June. It paid 775 million euros ($940 million) in 2018 in a settlement with Dutch prosecutors for failing to spot money laundering and other criminal activities by its clients.
The court of appeal in The Hague said on Wednesday that the 2018 settlement stands but that it had instructed prosecutors to open a new investigation into the role Hamers played.
"The court considers it important that in public criminal proceedings the standard is confirmed that managers of a bank do not go unpunished if they have actually led prohibited conduct," the ruling said.
No specific charges have been launched against Hamers and prosecutors could not immediately be reached for comment.
The case was brought by investors who argued that Hamers had been aware of money laundering and failed to stop it.
"UBS takes note of the decision of the Dutch court to order the public prosecutor to open an investigation of Ralph Hamers, in his capacity as the former CEO of ING, relating to ING's anti-money laundering compliance," Switzerland's biggest bank said in a statement.
Hamers succeeded Sergio Ermotti as chief executive of UBS in November.
"UBS has full confidence in Ralph Hamers' ability to lead UBS," the bank said.